Sports Direct International Plc (SPD), the U.K.’s largest sports retailer, headed for its highest close since first listing in London in February 2007, amid reports the company will pay employee bonuses linked to profit targets.
The shares rose as much as 6.4 percent, the biggest intraday gain since February. The stock traded 4.3 percent higher at 592 pence at 12:10 p.m. local time, giving the Mansfield, England-based company a market value of 3.5 billion pounds ($5.3 billion). The volume of shares traded was more than double the three-month daily average.
Sports Direct may report that pretax profit rose 41 percent to 213.8 million pounds when it releases full-year earnings in three days, according to the average of nine analysts in a survey compiled by Bloomberg. The retailer, which has about 400 stores, has benefited from the collapse of JJB Sports Plc last year.
“We are forecasting significant growth,” Matthew McEachran, an analyst at N+1 Singer Ltd. in London, said in a telephone interview. “The business saw off JJB Sports which is a lot of capacity withdrawal and that footfall is transfering predominantly across to Sports Direct. They have been improving the store propostion and their appeal to a wider audience as well as building a strong online presence.”
The average Sports Direct worker earning 20,000 pounds a year will get 12,000 shares, worth about 68,000 pounds, the Sunday Telegraph newspaper reported, without saying where it got the information.
A spokesman for Sports Direct declined to comment on the Sunday Telegraph report when contacted by Bloomberg.
To contact the editor responsible for this story: David Risser at email@example.com